Crawford Reports 2009 Third Quarter Results
Net Income Excluding Impairment Charge Improves
Company Amends Credit Agreement
- Press Release
- Source: Crawford & Company
- On 7:00 am EST, Monday November 9, 2009
ATLANTA, Nov. 9 /PRNewswire-FirstCall/ -- Crawford & Company (www.crawfordandcompany.com) (NYSE: CRDA; CRDB), the world's largest independent provider of claims management solutions to insurance companies and self-insured entities, today announced its financial results for the third quarter ended September 30, 2009.
Related Quotes
| Symbol | Price | Change |
|---|---|---|
| CRD-B | 3.82 | -0.08 |
Consolidated Results
Third quarter 2009 consolidated revenues before reimbursements decreased to $245.8 million compared to $266.9 million in the 2008 third quarter due primarily to the negative effect of foreign currency changes and lower revenues in the Broadspire and U.S. Property & Casualty segments. The third quarter 2009 net loss attributable to Crawford & Company was ($39.5) million, including a non-cash impairment charge of $46.9 million, primarily related to goodwill in the Company's Broadspire segment, compared to net income attributable to Crawford & Company of $6.9 million in the 2008 third quarter. The third quarter 2009 loss per share was ($0.76) compared to diluted earnings per share of $0.13 in the prior-year quarter. Excluding the non-cash impairment charge, third quarter 2009 net income attributable to Crawford & Company would have been $7.2 million and diluted earnings per share would have been $0.14.
In connection with the preparation of its September 30, 2009 financial statements, the Company completed its previously disclosed interim goodwill impairment analysis of the Broadspire segment which it began during the 2009 second quarter. As a result of this analysis, the Company recorded an additional non-cash impairment charge of $46.9 million, or $0.90 per share. Substantially all of this charge is not deductible for tax purposes. This impairment charge does not affect the Company's liquidity or cash flows and has no effect on the Company's compliance with the financial covenants under its credit agreement.
Revenues, net income and earnings per share in the 2009 third quarter were negatively impacted by increased defined benefit pension expense, the impact of foreign currency changes, and the non-cash impairment charge as outlined below:
Net Income (Loss)
Attributable
In millions, except per Revenues before to Crawford
share amounts Reimbursements & Company EPS
---------------------------- -------------- ------------- ---
3rd quarter 2008 results $266.9 $6.9 $0.13
------------------------ ------ ---- -----
(Less)/Add:
----------------------------
Foreign currency impact in
2009 (14.7) (0.7) (0.01)
-------------------------- ----- ---- -----
Increase in pension expense
in 2009 - (2.9) (0.05)
--------------------------- ----- ---- -----
All other operating changes (6.4) 3.9 0.07
--------------------------- ----- ---- ----
Subtotal excluding
impairment charge 245.8 7.2 0.14
------------------ ----- ---- ----
Impairment charge in 2009 - (46.7) (0.90)
------------------------- ----- ------ ------
3rd quarter 2009 results $245.8 ($39.5) ($0.76)
------------------------ ====== ======= =======
Crawford generated $9.8 million of cash from operating activities during the 2009 year-to-date period, compared to the $33.4 million in cash provided by operating activities during the comparable 2008 period. The $23.6 million decrease was due primarily to lower earnings during 2009 before the impairment charge and growth in working capital requirements. The Company's consolidated cash and cash equivalent position as of September 30, 2009 totaled $55.1 million compared to $56.8 million at September 30, 2008 and $73.1 million at December 31, 2008.
International Operations
Third quarter 2009 revenues before reimbursements for the International Operations segment declined 11.8% to $101.7 million from $115.4 million for the same period in 2008. Compared to the 2008 third quarter, during the 2009 third quarter the U.S. dollar was stronger against most major foreign currencies, resulting in a negative exchange rate impact. Excluding the negative impact of exchange rate fluctuations, International Operations revenues would have been $116.4 million in the 2009 third quarter, reflecting growth in revenues on a constant dollar basis of nearly 1.0%. Segment operating expenses for the 2009 third quarter decreased by $12.3 million in U.S. dollars, an 11.5% decrease, but increased by 1.3% on a constant dollar basis, compared to the 2008 period. Operating earnings declined to $7.3 million in U.S. dollars during the 2009 third quarter ($8.3 million on a constant dollar basis), down from last year's third quarter operating earnings of $8.6 million. The related operating margin was 7.1% in the 2009 third quarter, compared to a 7.4% operating margin in the 2008 third quarter.
U.S. Property & Casualty
U.S. Property & Casualty revenues before reimbursements were $52.3 million in the third quarter of 2009, decreasing 7.1% from $56.2 million in the 2008 third quarter, and reflecting softness in claims referred in the 2009 period. Revenues generated by the Company's catastrophe adjuster group were $6.3 million in the 2009 third quarter, unchanged from the level attained during the 2008 period. Operating earnings in the 2009 third quarter in the U.S. Property & Casualty segment were $4.9 million, or an operating margin of 9.3% of revenues, compared to operating earnings of $6.8 million, or 12.1% of revenues in the 2008 third quarter.
Broadspire
Revenues before reimbursements from the Broadspire segment were $70.4 million in the 2009 third quarter, down 8.4% from $76.9 million in the 2008 quarter. Broadspire had an operating loss of ($1.2 million) in the 2009 third quarter, or an operating margin of (1.7%) of revenues, compared to operating earnings of $1.1 million, or 1.4% of revenues, in the prior-year period. This decline was primarily due to lower workers' compensation claim referrals as a result of lower U.S. employment levels. The Company's impairment charge did not affect the segment operating results of Broadspire.
Legal Settlement Administration
Legal Settlement Administration revenues before reimbursements were $21.3 million in the 2009 third quarter, up 15.9% from $18.4 million in the 2008 quarter, reflecting the positive impact of several major bankruptcy and securities class action administration projects awarded to the Company during 2009. Operating earnings totaled $4.1 million in the 2009 third quarter, or an operating margin of 19.2% of revenues, compared to $2.9 million, or 15.5% of revenues, in the prior-year period. The segment's awarded project backlog totaled approximately $55.4 million at September 30, 2009.
Amended Credit Agreement
On November 2, 2009, the Company announced that it had entered into an amendment of its existing credit agreement. Among other provisions, the amendment allows an extension of the revolving commitments from October 30, 2011 until October 30, 2013, and also offers the Company additional financial flexibility.
The amendment provides that Crawford may increase the aggregate amount of its debt under the credit agreement by up to $50 million and may also issue other, unsecured debt of up to $200 million. It also updates certain covenants to allow for this additional flexibility and access to capital, while upwardly revising applicable interest rates.
Management's Comments
Mr. Jeffrey T. Bowman, chief executive officer of Crawford & Company, stated, "Our third quarter 2009 operating results are reflective of current global economic conditions which continue to be challenging. We are closely managing our cost structure in light of the prolonged nature and depth of the macroeconomic downturn and are simultaneously monitoring the markets we serve for growth opportunities. While our reported consolidated revenues and earnings are down year-over-year, there are encouraging areas within our business.
"Our International Operations segment continues to show revenue growth when measured in constant dollars. This growth comes in a very competitive environment where there has been an absence of significant catastrophic activity, and reflects the leadership position we enjoy in this market. Legal Settlement Administration has also grown its business this year partly as a result of increased bankruptcy administration projects. The strategic decision made several years ago to invest in this area is now providing us with a more diversified earnings stream in light of the decline in securities class action projects. We are pleased with the performance of this business year-to-date in 2009.
"We believe the recently announced amendment to our credit agreement is a reflection of our solid operational performance. It increases our financial flexibility and should help us continue to effectively manage our operations going forward. We are pleased with both the immediate and potential future implications of this amendment.
Mr. Bowman concluded, "Before the impairment charge, our operating results for the 2009 third quarter showed solid improvement over our first two quarters' results, even as the global economy remained weak. However, we are seeing some softness in claim assignments across our international and U.S. markets. While we remain confident in our long-term business model, our outlook for the 2009 fourth quarter is conservative as reflected in our revised guidance for the year. Included in that revised guidance is a fourth quarter special charge of $1.8 million, or $0.02 per share, related to a long-term sublease we have entered into for Broadspire's former headquarters building located in Plantation, Florida. We remain fully committed to managing our operations toward improved operating performance and market share expansion, and are focusing significant attention on our cost base across the entire organization to ensure we are operating as efficiently as possible."
2009 Guidance
Crawford & Company revised its previously issued guidance for full-year 2009 as follows:
- Consolidated revenues before reimbursements between $970 million and $975 million.
- Consolidated operating earnings between $48.5 million and $51.5 million.
- Consolidated cash provided by operating activities between $30.0 million and $35.0 million.
- After reflecting stock-based compensation expense, net corporate interest expense, customer-relationship intangible asset amortization expense, special charges and credits, and income taxes, net loss attributable to Crawford & Company on a GAAP basis between ($120.0) million and ($122.0) million, or ($2.32) to ($2.36) loss per share.
- Before reflecting the special charges related to the impairments, net income attributable to Crawford & Company on a non-GAAP basis between $19.1 million and $21.2 million, or $0.37 to $0.41 diluted earnings per share.
Crawford & Company's management will host a conference call with investors on Monday, November 9, 2009 at 3:00 p.m. EST to discuss earnings and other developments. The call will be recorded and available for replay through November 16, 2009. You may dial 1-800-642-1687 (706-645-9291 international) to listen to the replay. The access code is 38382799. Alternatively, please visit our web site at www.crawfordandcompany.com for a live audio web cast and related financial presentation.
Further information regarding the Company's financial position, operating results, and cash flows for the quarter and nine-month periods ended September 30, 2009 is shown on the attached condensed consolidated unaudited financial statements. Operating earnings (a non-GAAP financial measure) is the key financial performance measure used by the Company's senior management to evaluate the performance of its segments and make resource allocation decisions. The Company believes this measure is useful to investors in that it allows them to evaluate operating performance using the same criteria that management uses. Operating earnings represent net income (loss) attributable to Crawford & Company excluding net corporate interest expense, stock option expense, income tax expense, amortization of customer relationship intangible assets, unallocated corporate and shared costs, and certain other charges and credits. Net corporate interest expense, stock option expense and income taxes are recurring components of the Company's net income (loss), but they are not considered part of operating earnings since they are managed on a corporate-wide basis. Net corporate interest expense results from capital structure decisions made by the Company, stock option expense relates to historically granted stock options and employee stock purchase plan expenses which are not allocated to operating segments, and income taxes are based on statutory rates in effect in each of the locations where the Company provides services, and vary throughout the world. Amortization expense relates to non-cash amortization of customer relationship intangible assets resulting from business combinations. These costs are not allocated to the segments for assessing performance. None of the aforementioned costs relate directly to the Company's products or the performance of the Company's services and the Company believes it is therefore appropriate to exclude them in order to accurately assess the results of segment operating activities on a consistent basis. Certain other credits and charges represent events (gains on disposal of assets, restructuring activities, goodwill impairment, etc.) that are not considered part of segment operating earnings since they historically have not regularly impacted the Company's operating performance and are not expected to regularly impact future performance. Because this measure is not calculated and recognized in accordance with GAAP, it may not be comparable to similarly titled measures used by other companies and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP. Following is a reconciliation of segment operating earnings (loss) to net income (loss) attributable to Crawford & Company on a GAAP basis and the related margins as a percentage of revenues before reimbursements for all periods presented:
Quarter ended
----------------------------------------------
September 30, % September 30, %
2009 Margin 2008 Margin
------------ ------ ------------- ------
Operating Earnings (Loss):
U.S. property & casualty $4,862 9.3% $6,781 12.1%
International operations 7,258 7.1 8,594 7.4
Broadspire (1,171) (1.7) 1,079 1.4
Legal settlement
administration 4,097 19.2 2,853 15.5
Unallocated corporate
and shared costs (878) (0.4) (3,737) (1.4)
Add/(Deduct):
Other charges - - - -
Impairment charge (46,945) (19.1) - -
Stock option expense (266) (0.1) (243) (0.1)
Amortization expense (1,500) (0.6) (1,507) (0.6)
Net corporate interest
expense (3,126) (1.3) (4,334) (1.6)
Income taxes (1,841) (0.7) (2,564) (1.0)
------- -------
Net (loss) income
attributable to
Crawford & Company
($39,510) (16.1) $6,922 2.6
========= ======
Year-to-date period ended
----------------------------------------------
September 30, % September 30, %
2009 Margin 2008 Margin
------------ ------ ------------- ------
Operating Earnings (Loss):
U.S. property & casualty $17,250 10.7% $17,822 11.4%
International operations 22,943 7.9 28,027 8.4
Broadspire (3,731) (1.7) 5,366 2.3
Legal settlement
administration 9,911 15.8 8,492 14.9
Unallocated corporate
and shared costs (8,148) (1.1) (5,147) (0.7)
Add/(Deduct):
Other charges (1,815) (0.2) - -
Impairment charge (140,945) (19.3) - -
Stock option expense (696) (0.1) (717) (0.1)
Amortization expense (4,494) (0.6) (4,521) (0.6)
Net corporate interest
expense (10,251) (1.4) (13,406) (1.7)
Income taxes (4,576) (0.6) (11,994) (1.5)
------- --------
Net (loss) income
attributable to
Crawford & Company ($124,552) (17.0) $23,922 3.0
========== =======
Based in Atlanta, Georgia, Crawford & Company (www.crawfordandcompany.com) is the world's largest independent provider of claims management solutions to the risk management and insurance industry as well as self-insured entities, with a global network of more than 700 locations in 63 countries. The Crawford System of Claims Solutions(SM) offers comprehensive, integrated claims services, business process outsourcing and consulting services for major product lines including property and casualty claims management; workers' compensation claims and medical management, and legal settlement administration. The Company's shares are traded on the NYSE under the symbols CRDA and CRDB.
This press release contains forward-looking statements, including statements about the financial condition, results of operations and earnings outlook of Crawford & Company. Statements, both qualitative and quantitative, that are not historical facts may be "forward-looking" statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other federal securities laws. Forward-looking statements involve a number of risks and uncertainties that could cause actual results to differ materially from historical experience or Crawford & Company's present expectations. Accordingly, no one should place undue reliance on forward-looking statements, which speak only as of the date on which they are made. Crawford & Company does not undertake to update forward-looking statements to reflect the impact of circumstances or events that may arise or not arise after the date the forward-looking statements are made. For further information regarding Crawford & Company, including factors that could cause our actual financial condition, results of operations, or cash flows to differ from those described in any forward-looking statements, please read Crawford & Company's reports filed with the United States Securities and Exchange Commission and available at www.sec.gov or in the Investor Relations section of Crawford & Company's website at www.crawfordandcompany.com.
CRAWFORD & COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Unaudited
(In Thousands, Except Earnings Per Share Amounts and Percentages)
Nine Months Ended September 30 2009 2008 % Change
------------------------------ ---- ---- --------
Revenues:
Revenues Before Reimbursements $731,499 $785,693 -7%
Reimbursements 59,284 69,578 -15%
------ ------
Total Revenues 790,783 855,271 -8%
Costs and Expenses:
Costs of Services Before
Reimbursements 538,451 572,743 -6%
Reimbursements 59,284 69,578 -15%
------ ------
Total Cost of Services 597,735 642,321 -7%
Selling, General, and
Administrative 159,737 163,313 -2%
Corporate Interest Expense, Net 10,251 13,406 -24%
Restructuring Costs 1,815 - nm
Goodwill and Intangible Asset
Impairment Charges 140,945 - nm
------- -------
Total Costs and Expenses 910,483 819,040 11%
------- -------
(Loss) Income Before Income Taxes (119,700) 36,231 nm
Provision for Income Taxes 4,576 11,994 -62%
----- ------
Net (Loss) Income (124,276) 24,237 nm
Less: Net Income Attributable to
Noncontrolling Interests (276) (315) -12%
---- ----
Net (Loss) Income Attributable to
Crawford & Company ($124,552) $23,922 nm
========= =======
(Loss) Earnings Per Share - Basic and
Diluted ($2.41) $0.47 nm
------ -----
Weighted-average Shares Used in Calculating:
Basic (Loss) Earnings Per Share 51,755 50,870
------ ------
Diluted (Loss) Earnings Per Share 51,755 51,275
------ ------
===================
nm = not meaningful
CRAWFORD & COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Unaudited
(In Thousands, Except Earnings Per Share Amounts and Percentages)
Three Months Ended September 30 2009 2008 % Change
------------------------------- ---- ---- --------
Revenues:
Revenues Before Reimbursements $245,752 $266,916 -8%
Reimbursements 23,105 24,416 -5%
------ ------
Total Revenues 268,857 291,332 -8%
Costs and Expenses:
Costs of Services Before
Reimbursements 179,405 196,329 -9%
Reimbursements 23,105 24,416 -5%
------ ------
Total Cost of Services 202,510 220,745 -8%
Selling, General, and Administrative 53,835 56,606 -5%
Corporate Interest Expense, Net 3,126 4,334 -28%
Goodwill and Intangible Asset
Impairment Charges 46,945 - nm
------ -------
Total Costs and Expenses 306,416 281,685 9%
------- -------
(Loss) Income Before Income Taxes (37,559) 9,647 -489%
Provision for Income Taxes 1,841 2,564 -28%
----- -----
Net (Loss) Income (39,400) 7,083 -656%
Less: Net Income Attributable to
Noncontrolling Interests (110) (161) -32%
---- ----
Net (Loss) Income Attributable to
Crawford & Company ($39,510) $6,922 -671%
======== ======
(Loss) Earnings Per Share:
Basic ($0.76) $0.14 nm
------ -----
Diluted ($0.76) $0.13 nm
------ -----
Weighted-average Shares Used in Calculating:
Basic (Loss) Earnings Per Share 52,011 50,994
------ ------
Diluted (Loss) Earnings Per Share 52,011 52,022
------ ------
===================
nm = not meaningful
CRAWFORD & COMPANY
SUMMARY RESULTS BY OPERATING SEGMENT
Nine Months Ended September 30
Unaudited
(In Thousands, Except Percentages)
U.S. Property &
Casualty % International %
2009 2008 Change 2009 2008 Change
==== ==== ====== ==== ==== ======
Revenues Before
Reimbursements $161,852 $156,935 3.1% $288,724 $335,505 -13.9%
Compensation &
Benefits 96,968 96,277 0.7% 200,510 229,992 -12.8%
% of Revenues
Before
Reimbursements 59.9% 61.3% 69.4% 68.6%
Expenses Other than
Reimbursements,
Compensation &
Benefits 47,634 42,836 11.2% 65,271 77,486 -15.8%
% of Revenues
Before
Reimbursements 29.4% 27.3% 22.7% 23.0%
---- ---- ---- ----
Total Operating
Expenses 144,602 139,113 3.9% 265,781 307,478 -13.6%
------- ------- --- ------- ------- -----
Operating Earnings
(Loss) (1) $17,250 $17,822 -3.2% $22,943 $28,027 -18.1%
% of Revenues
Before
Reimbursements 10.7% 11.4% 7.9% 8.4%
---- ---- --- ---
Legal Settlement
Broadspire % Administration %
2009 2008 Change 2009 2008 Change
==== ==== ====== ==== ==== ======
Revenues Before
Reimbursements $218,087 $236,289 -7.7% $62,836 $56,964 10.3%
Compensation &
Benefits 123,064 132,672 -7.2% 27,262 26,571 2.6%
% of Revenues
Before
Reimbursements 56.4% 56.1% 43.4% 46.6%
Expenses Other than
Reimbursements,
Compensation &
Benefits 98,754 98,251 0.5% 25,663 21,901 17.2%
% of Revenues
Before
Reimbursements 45.3% 41.6% 40.8% 38.5%
---- ---- ---- ----
Total Operating
Expenses 221,818 230,923 -3.9% 52,925 48,472 9.2%
------- ------- ---- ------ ------ ---
Operating Earnings
(Loss) (1) ($3,731) $5,366 -169.5% $9,911 $8,492 16.7%
% of Revenues
Before
Reimbursements -1.7% 2.3% 15.8% 14.9%
---- --- ---- ----
Three Months Ended September 30
Unaudited
(In Thousands, Except Percentages)
U.S. Property &
Casualty % International %
2009 2008 Change 2009 2008 Change
==== ==== ====== ==== ==== ======
Revenues Before
Reimbursements $52,253 $56,227 -7.1% $101,725 $115,362 -11.8%
Compensation &
Benefits 31,976 34,115 -6.3% 70,420 79,656 -11.6%
% of Revenues
Before
Reimbursements 61.2% 60.7% 69.2% 69.0%
Expenses Other
than
Reimbursements,
Compensation &
Benefits 15,415 15,331 0.5% 24,047 27,112 -11.3%
% of Revenues
Before
Reimbursements 29.5% 27.2% 23.7% 23.6%
---- ---- ---- ----
Total
Operating
Expenses 47,391 49,446 -4.2% 94,467 106,768 -11.5%
------ ------ ---- ------ ------- -----
Operating
Earnings
(Loss) (1) $4,862 $6,781 -28.3% $7,258 $8,594 -15.5%
% of Revenues
Before
Reimbursements 9.3% 12.1% 7.1% 7.4%
--- ---- --- ---
Legal Settlement
Broadspire % Administration %
2009 2008 Change 2009 2008 Change
==== ==== ====== ==== ==== ======
Revenues Before
Reimbursements $70,430 $76,911 -8.4% $21,344 $18,416 15.9%
Compensation &
Benefits 39,293 43,552 -9.8% 9,426 8,494 11.0%
% of Revenues
Before
Reimbursements 55.8% 56.6% 44.2% 46.1%
Expenses Other than
Reimbursements,
Compensation &
Benefits 32,308 32,280 0.1% 7,821 7,069 10.6%
% of Revenues
Before
Reimbursements 45.9% 42.0% 36.6% 38.4%
---- ---- ---- ----
Total
Operating
Expenses 71,601 75,832 -5.6% 17,247 15,563 10.8%
------ ------ ---- ------ ------ ----
Operating
Earnings
(Loss) (1) ($1,171) $1,079 -208.5% $4,097 $2,853 43.6%
% of Revenues
Before
Reimbursements -1.7% 1.4% 19.2% 15.5%
---- --- ---- ----
(1) A non-GAAP financial measurement which represents net income
attributable to Crawford & Company excluding net corporate interest
expense, amortization of customer-relationship intangible assets, stock
option expense, income tax expense, unallocated corporate and shared
costs, restructuring costs, and goodwill impairment charge. See page 6 for
a reconciliation of Operating Earnings to Net (Loss) Income computed in
accordance with GAAP.
CRAWFORD & COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
As of September 30, 2009 and December 31, 2008
(In Thousands, Except Par Values)
Unaudited *
September 30 December 31
Assets 2009 2008
------ ---- ----
Current Assets:
Cash and Cash Equivalents $55,089 $73,124
Accounts Receivable, Net 161,507 157,430
Unbilled Revenues, Net 102,521 99,115
Prepaid Expenses and Other
Current Assets 22,725 18,688
------ ------
Total Current Assets 341,842 348,357
------- -------
Property and Equipment 146,601 140,399
Less Accumulated Depreciation (104,189) (95,785)
-------- -------
Net Property and Equipment 42,412 44,614
------ ------
Other Assets:
Goodwill 119,760 251,897
Intangible Assets Arising from Business
Acquisitions, Net 106,007 111,389
Capitalized Software Costs, Net 48,803 46,296
Deferred Income Tax Asset, Net 65,952 67,695
Other Noncurrent Assets 24,693 25,000
------ ------
Total Other Assets 365,215 502,277
------- -------
Total Assets $749,469 $895,248
======== ========
Liabilities and Shareholders' Investment
----------------------------------------
Current Liabilities:
Short-Term Borrowings $11,327 $13,366
Accounts Payable 34,457 40,711
Accrued Compensation and Related
Costs 69,227 77,802
Other Accrued Current Liabilities 52,990 56,978
Self-Insured Risks 18,807 17,939
Accrued Income Taxes 7,513 9,937
Deferred Revenues 59,312 59,679
Current Installments of Long-Term
Debt and Capital Leases 2,296 2,284
----- -----
Total Current Liabilities 255,929 278,696
------- -------
Noncurrent Liabilities:
Long-Term Debt and Capital Leases, Less
Current Installments 179,494 181,206
Deferred Revenues 35,824 42,795
Self-Insured Risks 16,492 18,531
Accrued Pension Liabilities 173,077 179,542
Other Noncurrent Liabilities 13,504 14,119
------- -------
Total Noncurrent Liabilities 418,391 436,193
------- -------
Shareholders' Investment:
Class A Common Stock, $1.00 Par Value 27,355 26,523
Class B Common Stock, $1.00 Par Value 24,697 24,697
Additional Paid-in Capital 27,178 26,342
Retained Earnings 131,594 256,146
Accumulated Other Comprehensive Loss (140,272) (158,157)
-------- --------
Total Crawford & Company
Shareholders' Investment 70,552 175,551
Noncontrolling Interests 4,597 4,808
----- -----
Total Shareholders' Investment 75,149 180,359
------ -------
Total Liabilities and Shareholders'
Investment $749,469 $895,248
======== ========
* Derived from the audited Consolidated Balance Sheet
CRAWFORD & COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Nine Months Ended September 30, 2009 and September 30, 2008
Unaudited
(In Thousands)
2009 2008
---- ----
Cash Flows From Operating Activities:
-------------------------------------
Net (Loss) Income ($124,276) $24,237
Reconciliation of Net (Loss) Income
to Net Cash Provided By
Operating Activities:
Depreciation and Amortization 23,102 22,737
Goodwill and Intangible Asset Impairment
Charges 140,945 -
Stock-Based Compensation 3,118 4,345
Loss on Sales of Property and Equipment, Net 54 67
Changes in Operating Assets and Liabilities, Net
of Effects of Acquisitions and Disposition:
Accounts Receivable, net 2,626 2,003
Unbilled Revenues, net 2,105 3,903
Accrued Income Taxes (4,139) 6,609
Accounts Payable and Accrued
Liabilities (15,686) 11,062
Deferred Revenues (7,791) (13,845)
Retirement Plan Liabilities (5,728) (23,435)
Prepaid Expenses and Other
Operating Activities (4,539) (4,249)
------ ------
Net Cash Provided By Operating Activities 9,791 33,434
----- ------
Cash Flows From Investing Activities:
-------------------------------------
Acquisitions of Property and Equipment, net (6,346) (9,737)
Capitalization of Computer Software Costs (10,775) (11,518)
Other Investing Activities (1,089) (204)
------ ----
Net Cash Used In Investing Activities (18,210) (21,459)
------- -------
Cash Flows From Financing Activities:
-------------------------------------
Shares used to settle withholding taxes under
stock-based compensation plans (1,903) (20)
Proceeds from exercises of stock options/ESPP
plans 453 2,016
Decrease in Short-Term Borrowings, net (6,964) (5,864)
Payments on Long-Term Debt and
Capital Lease Obligations (1,837) (1,970)
Capitalized Loan Costs (944) -
Other Financing Activities (274) (309)
---- ----
Net Cash Used In Financing Activities (11,469) (6,147)
------- ------
Effect of Exchange Rate Changes on
Cash and Cash Equivalents 1,853 136
----- ---
Change in Cash and Cash Equivalents (18,035) 5,964
Cash and Cash Equivalents at Beginning of Period 73,124 50,855
------ ------
Cash and Cash Equivalents at End of Period $55,089 $56,819
======= =======
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